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Fan industry expects PLI scheme to make India a manufacturing hub

IBEF:  October 01, 2021

The Indian fan industry is optimistic that BEE Star labelling criteria will be met, and that a Production Liked Incentives (PLI) scheme would help the nation become a manufacturing powerhouse.

The industry is also pushing for a lower GST rate for fans, from 18% to 5%, to aid with category growth and bear the additional burden of energy labelling.

From July 1 of next year, the BEE Star labelling scheme for the fans industry will be required.

The adoption of energy-efficient fans, according to the Indian Fan Manufacturers Association (IFMA), would reduce power consumption in Indian households while also raising the price of fans by 25-30%.

According to IFMA Chairman Mr. Ravindra Singh Negi, “Compliance with energy efficiency requirements would have a cost impact of 25-30%.”

Despite the pandemic challenges, he is optimistic that the industry will embrace energy labelling programmes. Manufacturers of fans would have to invest in capacity growth and energy-efficient technologies to achieve this.

“A lower GST rate would give much-needed working capital and encourage the sector to create new fans that meet energy efficiency standards. The sector looks forward to embracing sustainable and energy-efficient technologies and ensuring successful execution of BEE Star Labelling Requirements with the appropriate governmental backing” said Mr. Negi, who is also the President of Havells' Electrical Consumer Durables division.

Also added, fans are a necessary item for the general public and should be taxed at a reduced rate.

A PLI scheme for the fans industry, according to IFMA Vice-Chairman Mr. Anuj Poddar, can assist establish a stronger environment for manufacturing for exports.

He went on to say that this will enable the country to develop its capacity for TPW fans (non-ceiling fans) for foreign markets.

In terms of value, the Indian fan sector is currently valued at approximately Rs. 8,000 crore (US$ 1.07 billion), and it produces around 60 million units each year.

According to former IFMA Chairman Mr. Atul Jain, the sector took a hit during the two pandemic waves, with an impact of about 18 to 20%.

According to Mr. Jain, the months of March to June account for almost 45% of the industry's revenues, and sales have increased for two years in a row.

However, he said that, thanks to strong traction in the second half, the sector is projected to return to pre-pandemic levels of sales in 2021.

Over 500 fan and component manufacturers are represented by IFMA, which has a distribution network of over 1.5 lakh retail locations.

Disclaimer: This information has been collected through secondary research and IBEF is not responsible for any errors in the same.